Bush's State of the Union speech was very heavy on trade.  He wants the Columbia, Panama and South Korea deals.  He wants them badly.

Even if you like those deals, why are they so important to be in the top three issues in the State of the Union speech?  That's a very high priority.  I can't answer that, so I'll go to criticism.

Memo to Bush:  I agree with you on one thing.  Other nations should treat us as we treat them on trade.  Here's what you said at the Robinson Helicopter Company on January 30, 2008:

Reasonable policy says to nations, you treat us the way we treat you. That's all we're asking for. ... But we want to be treated equally too. Good trade policy is fair trade policy.

So if currency manipulation happens, we should countervail it.  If VAT tariffs exist, we should countervail them or impose our own.  If we have good food and product inspection and quality rules, we should impose the same on the imports.  Too bad this doesn't happen. 

The rest of Bush's speech says that trade causes exports, and exports mean jobs.  As always, no mention of imports.  Imports don't exist.  Outsourcing does not exist.

We really do need to stop the new trade agreements.  Voters need to grill their candidates on whether they support current trade policy. 

There is simply no way to change trade policy without stopping new agreements.  The editorial pages will scold us all for not understanding Economics 101.  But only then will the multinational lobbyists come to the table. 

Comments (1)

Economics 101 : Robert Powell : http://www.exponentialimprovement.com They see us as "not understanding Economics 101." They come to this conclusion because they don't understand, or want to understand, that much in the world does not obey the simplistic theories of Economics 101. They don't understand that "comparative advantage" doesn't apply to the real world of "trade." They ignore the basic concepts and impacts of adverse selection (that leads to a health insurance death spiral), of negative externalities (the redistribution of costs), of positive externalities (government is necessary to take advantage of them), of monopolies (that destroy competition), and of Net Present Value calculations (that lead to short-term thinking ... only government can promote long-term investment). Unfortunately, economic "conservatives" and libertarians either don't understand economics because of simple-minded ideology or because it's not in their financial interest to understand. And the latter reinforces the former. See "The Trade Deficit and the Fallacy of Composition" and "Explaining Liberal Principles" on my site. February 06, 2008

Write comment

Name

Email

Website

Title

Comment

Write the displayed characters

Add Comment